DouYu International Holdings Limited Reports Third Quarter 2021 Unaudited Financial Results
DouYu International Holdings Limited (“DouYu” or the “Company”) (Nasdaq: DOYU), a leading game-centric live streaming platform in China and a pioneer in the eSports value chain, today announced its unaudited financial results for the third quarter ended September 30, 2021.
Third Quarter 2021 Financial and Operational Highlights
- Total net revenues in the third quarter of 2021 were RMB2,348.0 million (US$364.4 million), compared with RMB2,546.5 million in the same period of 2020.
- Gross profit in the third quarter of 2021 was RMB278.5 million (US$43.2 million), compared with RMB369.4 million in the same period of 2020.
- Net loss in the third quarter of 2021 was RMB143.5million (US$22.3 million), compared with a net income of RMB59.6 million in the same period of 2020.
- Adjusted net loss [1]in the third quarter of 2021 was RMB72.7 million (US$11.3 million), compared with an adjusted net income of RMB98.7 million in the same period of 2020.
- Average mobile MAUs[2] in the third quarter of 2021 increased by 3.9% to 61.9 million from 59.6 million in the same period of 2020.
- Quarterly average paying user[3] count in the third quarter of 2021 was 7.2million, compared with 7.9 million in the same period of 2020.
Mr. Shaojie Chen, Chief Executive Officer of DouYu, commented, “Our core operating metrics continued to grow steadily in the third quarter of 2021, with our quarterly average mobile MAUs increasing by 3.9% year over year to 61.9 million. Going forward, we plan to continue expanding our game genres and enriching our content offerings. We are committed to building DouYu into an industry-leading game-centric content ecosystem by leveraging our customized marketing strategies, adaptive operating strategies, and our diverse content formats encompassing live streaming, video, texts, graphics, and social community.”
Mr. Hao Cao, Vice President of DouYu, commented, “In the third quarter of 2021, our total revenues were RMB2.35 billion. Our gross profit was RMB279 million, representing a gross margin of 11.9%. During the quarter, we maintained our efforts in optimizing the synergy among various content in live streaming, video, texts, graphics, and social communities. We also made further investment into augmenting our proprietary content production capabilities. Looking ahead, we will keep exploring additional ways to diversify our monetization methods and generate long-term shareholder value.”
Third Quarter 2021 Financial Results
Total net revenues in the third quarter of 2021 were RMB2,348.0 million (US$364.4 million), compared with RMB2,546.5 million in the same period of 2020.
Live streaming revenues in the third quarter of 2021 were RMB2,210.5 million (US$343.1 million), compared with RMB2,348.7 million in the same period of 2020. The decrease was primarily due to the higher revenue base in the prior year period as a result of several notable fan engagement events launched in the summer of last year to facilitate paying user conversion. This decline was partially offset by the organic growth in average revenues per paying user which benefited from the Company’s implementation of more effective operational strategies.
Advertising and other revenues in the third quarter of 2021 were RMB137.5 million (US$21.3 million), compared with RMB197.8 million in the same period of 2020. The year-over-year decrease was due to the exploration of new commercialization models by using a portion of advertising traffic that could have been directly monetized.
Cost of revenues in the third quarter of 2021 was RMB2,069.5 million (US$321.2 million), compared with RMB2,177.1 million in the same period of 2020. The decrease in year-over-year comparison was primarily due to the decreases in revenue sharing fees and content costs and bandwidth costs.
Revenue sharing fees and content costs in the third quarter of 2021 decreased by 5.6% to RMB1,839.9 million (US$285.5 million) from RMB1,949.1 million in the same period of 2020. The decrease is in accordance with decreased live streaming revenues. This decrease was partially offset by higher spending on the acquisition of e-Sports tournament broadcasting rights and additional investments in proprietary content production, as the Company continued to invest in high quality gaming content.
Bandwidth costs in the third quarter of 2021 decreased by 3.4% to RMB163.4 million (US$25.4 million) from RMB169.1 million in the same period of 2020. This decrease was mainly due to lower bandwidth costs per unit as a result of improved procurement efficiency, and higher bandwidth efficiency from continuous in-house technology upgrades.
Gross profit in the third quarter of 2021 was RMB278.5 million (US$43.2 million), compared with RMB369.4 million in the same period of 2020. Gross margin in the third quarter of 2021 was 11.9%, compared with 14.5% in the same period of 2020. This decrease was primarily due to the decline in revenues exceeding the decrement of revenue sharing fees and content costs.
Sales and marketing expenses in the third quarter of 2021 increased 36.6% to RMB218.9 million (US$34.0 million) from RMB160.3 million in the same period of 2020. The increase was mainly attributable to the increased promotional channels for user acquisition.
Research and development expenses in the third quarter of 2021 increased 12.4% to RMB123.2 million (US$19.1 million) from RMB109.6 million in the same period of 2020. The increase was primarily attributable to additional investments in technical personnel due to Company’s further overseas expansion and technology infrastructure upgrade to enhance user experience.
General and administrative expenses in the third quarter of 2021 decreased 8.1% to RMB86.5 million (US$13.4 million) from RMB94.2 million in the same period of 2020.
Other operating income, net in the third quarter of 2021 was RMB25.8 million (US$4.0 million), compared with RMB32.5 million in the same period of 2020.
Loss from operations in the third quarter of 2021 was RMB124.3 million (US$19.3 million), compared with a profit from operations of RMB37.9 million in the same period of 2020.
Adjusted loss from operations in the third quarter of 2021, which adds back share-based compensation expenses, was RMB91.0 million (US$14.1 million), compared with an adjusted operating income of RMB71.2 million in the same period of 2020.
Income tax expenses in the third quarter of 2021 and 2020 were nil due to the Company’s cumulative net losses and the resulting tax loss carry forward.
Net loss in the third quarter of 2021 was RMB143.5 million (US$22.3 million), compared with a net income of RMB59.6million in the same period of 2020.
Adjusted net loss in the third quarter of 2021, which excludes share-based compensation expenses, share of income in equity method investments, and impairment loss of investments, was RMB72.7 million (US$11.3 million), compared with an adjusted net income of RMB98.7 million in the same period of 2020.
Basic and diluted net loss per ADS[4] in the third quarter of 2021 were RMB0.37 (US$0.06) and RMB0.37 (US$0.06) respectively. Adjusted basic and diluted net loss per ADS in the third quarter of 2021 were RMB0.16 (US$0.02) and RMB0.16 (US$0.02) respectively.
Cash and cash equivalents, restricted cash and bank deposits
As of September 30, 2021, the Company had cash and cash equivalents, restricted cash, short-term and long-term bank deposits of RMB7,078 million (US$1,098 million), compared with RMB7,622 million as of December 31, 2020.
Share Repurchase Program
On August 30, 2021, the Company announced that its board of directors had authorized a share repurchase program under which the Company may repurchase up to US$100 million of its ordinary shares in the form of ADSs during a period of up to 12 months commencing on August 30, 2021. The Company expects to utilize existing funds to make repurchases under this program. As of September 30, 2021, the Company had repurchased an aggregate of US$4.3 million worth of its ADSs under this program.
